FROM OFFER TO CLOSING
Consistent with my experience that an educated seller is a more successful seller, I’d like to walk through the steps from the point of accepting an offer to the settlement or closing day.
As stated in the agreement of sale, the buyers have a period of time (usually 15 days) within which to accomplish a variety of inspections (property, termite, radon, etc.). I will let you know when these inspections are scheduled. You do not have to be at the house for any of them. The buyer’s agent, and sometimes I will accompany the inspector and the buyers. The property and termite inspections usually will be finished on the day they are scheduled.
The radon test (if done), will involve having canisters or a monitor installed in the basement and on the first floor. They will have to stay in place for 48 hours while an air sample is gathered. During this time the windows or doors MUST remain closed, save normal in and out trafic. At the end of the 48 hours, the testing company will come back to pick up the canisters or monitor and the air samples will be sent away for evaluation.
If a mold test is being done, results typically take 5 days to culture and come back. At the conclusion of all of the inspections, we will receive either a release from the buyers (stating that all inspections are complete and the results satisfactory) or an addendum requesting any changes to the original agreement of sale (repairs, credits, etc.).
Early in the process the buyers (or their mortgage company) will be ordering a title search, an appraisal and homeowners insurance. As a result there may be several other times that people will have to access the house: an appraiser may be sent from the buyer’s mortgage company to confirm the value of the house, and a representative from the buyer’s insurance company may have to visit the house for underwriting purposes. You will be notified about all of these visits in advance. The title search will generate a report of all recorded information about the property (mortgages, judgments, liens) and may require a response of some type depending on the status of particular items.
The date and time for settlement is established by mutual agreement between buyer and seller and can occur on or before the date specified in the agreement of sale. However, any change to the date specified in the contract must be discussed and formalized in writing by all parties well in advance of the original settlement date.
You should notify your own insurance company about the date of settlement and alert them that you will be canceling your policy shortly after settlement. You may be eligible for a refund from your insurance company and your mortgage company for any unused monies they have collected for homeowners insurance or real estate taxes. You may want to check with both of them about this possibility. If you have an ‘auto draft’ for the payment of your mortgage please notify both your bank and the mortgage company to suspend that privilege as of your settlement date. The mortgage payoff department is independent of the payment department so you must notify the payment dept. of this cancellation.
Preparing for Settlement
A week or so before settlement, you should contact the appropriate utility companies (gas, electric, telephone, cable, alarm) about having service stopped in your name as of the settlement date. Please note that the agreement of sale stipulates that the gas and electric must be on for the pre-settlement walk-through. In Philadelphia, you do not have to contact the Philadelphia Water Department to have service stopped in your name. An adjustment for the water usage will be made at settlement and the title company will notify the water department about the change of ownership. Approximately one week before settlement you will receive a letter confirming the date, time and location of your settlement. If you cannot attend the settlement for any reason, please let me know as soon as possible so that we can arrange for you to sign the necessary documents in advance.
Preparing/Maintaining the Property Prior to Settlement
The property, grounds, fixtures, and any personal property specifically mentioned in the agreement of sale must be maintained in the same condition as at the time of the agreement of sale (normal wear and tear excepted). In the event any system or appliance included in the sale of the property fails, it is your responsibility to repair or replace it before settlement or credit the buyer at settlement for the fair market value of the failed system or appliance. Should anything like this occur, please call me immediately so that we can discuss your options. Please be sure you have fully functional smoke detectors on every level in your home (with new construction one in each bedroom as well). You will be asked to sign a document to this effect at settlement.
Your house must be completely empty of all possessions and clean of all trash and debris (broom clean) by the day of settlement. This includes items such as old paint cans (unless the buyers have requested that they remain). On the day of settlement you will meet your agent at the specified time and location and proceed to sign the necessary documents and turn over all keys to the property. Be sure to bring electric garage door openers and any other gadget for access specific to your house.
I have probably not answered all of the questions that will arise over the next month or two, but hopefully this is a start. The most important thing to remember is that I am here to help you in any way you need help. Selling a house can be a complex process and it is my job to make this as easy on you as I can.